The Shape of Things To Come
Nov 21st, 2005 at 10:53 am by Susie
Piqued by a friend’s email, I did a little searching and found this:
If you have celebrated the recent fall in gasoline prices, then I suggest that you take off that stupid-looking party hat, sober up, walk over to the telephone and buy oil and oil stocks, because James Howard Kunstler, in his Commentary on the Flux of Events, writes, “Since the hurricanes shredded our Gulf of Mexico oil and gas capacity, Europe has been sending us 2 million barrels of crude oil and ‘refined product’ a day from its collective strategic petroleum reserve. Now, the important part of all this is that last week the International Energy Agency (IEA), Europe’s energy security watchdog, declared that it would now end the 2 million barrel a day shipments to the US.”
He doesn’t even mention the part about how our government opened the taps of the Strategic Petroleum Reserve to flood the market with oil, or the fact that the government is going to have to, soon, buy more oil to replace what was released from the SPR.
And speaking of the IEA, they also calculate that global oil demand will increase by 1.75 million barrels per day in 2006, mostly due to increased demand from China and India. This is an increase in demand of approximately 2%, while supply is expected to increase by a smaller amount than that. It doesn’t take a PhD in economics to realize that demand rising faster than supply means higher prices. In fact, it takes no education at all, as all you have to do is stand within earshot of me, and you can hear me yelling “Buy oil and oil stocks!” And if you stand not only within earshot, but also downwind of me, you can smell me, too, but that doesn’t say anything about oil, but only why I am so lonely. And blue. Lonely and blue. And angry. Very, very angry all the freaking time, because our money and our economy are being destroyed all the freaking time.
In short, says Mr. Kunstler, “We can look forward to watching the price of gasoline, heating oil, diesel and aviation fuel kick back up through Thanksgiving and on into the heart of the Christmas shopping season. At the same time, homeowners will be getting their first substantial heating bills of the season.” Ugh.
You know things are bad when even the neocons are pushing for energy efficiency.
I’ve written quite a lot about this generally, and through Katrina, specifically. The Oil Drum also is an excellent resource for keeping up with the ups/downs of oil, gas, and gasoline.
Yes, the imports will stop. But the “driving season” is also over. In short, foreign suppliers have been working with the U.S. to keep supplies coming. It’s conservation in the face of high prices that has resulted in the recent downturn in price. The gulf capacity will largely be back on line by the first of the year.
But as I’ve also written, it’s just a brief headfake in peak oil. Markets/prices never go straight up or down. Three dollar/gallon gasoline is something that won’t shock the next time, which will likely be next summer.
Since natural gas is virtually 100% domestic, and mostly from the Gulf region, it’s a whole other story.
I agree with Mike. It seemed to me like a marketing experiment–what is the pain threshold for gas consumers? When the price of gas hit a certain level, the screaming began.
So they backed off, and the price of gas has gradually lowered to what people NOW see as reasonable.
They’ll do it again, and again, and like rats in a maze, we’ll tolerate more and more painful shocks.
And we don’t even get reward pellets.
I agree that the era of easy oil is coming to an end, but you should take anything from Kunstler with a small grain of salt; the man is Mr. Worst Case Scenerio personified.
Fair enough, Geoduck, I will. But like they say over at the flu wikie, if you aren’t prepared for the worst-case scenario, you’re not prepared.